The enlarged group will be 52% owned by KarstadtQuelle and 48% owned by the shareholders of MyTravel.

It will be led by a board drawn from MyTravel, Thomas Cook and KarstadtQuelle, with additional independent non-executive directors.

'Quality' holidays

The group will be chaired by Thomas Middelhoff, chief executive of KarstadtQuelle and chairman of Thomas Cook, deputy chaired by Michael Beckett, chairman of MyTravel.

It will be managed on an interim basis by joint chief executives Peter McHugh, chief executive of MyTravel, and Manny Fontenla-Novoa, chief executive of Thomas Cook.

Thomas Middelhoff, CEO of KarstadtQuelle and chairman of Thomas Cook said: "The combined organisations will offer customers unrivalled choice and quality for their holiday and leisure time in all of the markets in which we operate."

The German retailer agreed to buy the half of Thomas Cook it did not own from Deutsche Lufthansa in December for 800m euros.

After announcing the merger MyTravel and Thomas Cook said they had no intention of bidding for rival UK holiday firm First Choice's package-holiday business.